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				<p class="content-title">Sources of Revenues </p>
				<ul>
					<li>Philanthropy and Grants</li>
					<p class="paragraph">
						Grants are intended funds disburse by a donor, either a government corporation or a foundation, intended for a specific purpose, such as for conducting 
						research, outreach programs, build new facilities, and so on.  “Grant writing” is required in order to apply for a grant.
					</p>
					<li>Global Budgets</li>
					<p class="paragraph">
						Global Budget is a fixed amount to cover the overall cost of a certain health care services. This is usually set by the government for state mental 
						hospitals, military hospitals, and hospitals run by the Department of Veterans Affairs and other government entities, as well as a few specialized private 
						institutions.
					</p>
					<li>Charges</li>
					<p class="paragraph">
						Hospital charges, also called list charges, are the amount of expenses rendered for such service.  These form the basis for reimbursement under discount 
						charges or a cost reimbursement system.
					</p>
					<li>Per Diem</li>
					<p class="paragraph">
						Per Diem (“Per Day”) is the charging of daily rates for services. Today, per diems are often negotiated with managed care firms under very competitive 
						conditions and are set below average costs per day in order for a hospital to maintain or increase its market share.
					</p>
					<li>Cost Reimbursement</li>
					<p class="paragraph">
						Cost Reimbursement sets the payment levels equal to the hospital’s actual costs.
					</p>
					<li>Diagnosis-Related Groups</li>
					<p class="paragraph">
						Diagnosis-Related Group is a system of reimbursement that compensates by the case based on the diagnosis of the treatment. In essence, DRGs are prices set 
						by the government at what it believes are a fair rate. It is also called a prospective payment system because DRG rates are set in advance, which is not the 
						case with retrospective cost reimbursement payments, which are continually adjusted to match any change in costs.
					</p>
					<li>Capitation</li>
					<p class="paragraph">
						Capitation is a payment per person for a defined set of services. It can be both beneficial and harmful to revenues depending on the type of health care 
						organizations and services involved. With capitation, an organization has a definite amount of revenue coming in. When a hospital sets up a capitation 
						arrangement, some larger organization creates an insurance company/health maintenance organization (HMO) to provide services on a capitated basis.
					</p>
					<li>Health Insurance</li>
					<p class="paragraph">
						Health Insurance covers the medical and surgical expenses acquired by the individual. It can compensates the expenses incurred from illness or injury, or 
						pay the care provider directly.
					</p>
					<p class="paragraph">Two Types of Health Insurance:</p>
					<ol type="1" class="paragraph">
						<li>
							Fee-For Service- a traditional kind of health care policy wherein insurance companies pay medical staff fees for each service provided to an insured 
							patient. For insured patients, two contracts are created: one between the doctor and the patient, and one between the patient and the insurance company.
						</li>
						<p class="paragraph">
							The Blue Cross System, developed in 1929 and were health insurance originated, is a pre-payment plan that covers primarily for hospital services.  The 
							only requirement for participation by an employer was that all employees, whether sick or healthy, had to join, again spreading the risk over the whole 
							group. Blue Shield was developed following the same plan to cover ambulatory medical care. The Blue Cross/Blue Shield plans were developed to complement 
							the traditional method of paying for health care, often called fee-for-service.  In 1965, the US Congress established Medicare as Title XVIII of the Social 
							Security Act and began coverage in July 1966. Medicare is designed to assist individuals aged 65 and older, some disabled individuals under the age of 65, 
							as well as patients with end-stage renal (kidney) disease (ESRD). Medicare coverage is tied to eligibility for Social Security or Railroad Retirement benefits. 
							However, persons receiving early retirement benefits from Social Security are not eligible for Medicare until they turn 65. Medicare enrolment is handled by 
							the Social Security Administration. Unlike Medical Assistance, Medicare is not based on income or assets. Its companion program, Medicaid, Title XIX of the 
							Social Security Act, was established for individuals with low incomes. Medicaid and Medicare have affected the hospital finances, diminishing the traditional 
							practice of hospitals of begging for money, for it provided government funds for hospital care of low income population and older adults.
						</p>
						<li>Managed Care</li>
						<p class="paragraph">
							Managed Care Contracts have the role of a care manager that separates it from cost reimbursements and payment charges. The care manager is a health care 
							professional, a specialized nurse or physician, that assess the patient’s case or needs to determine and develop a plan of care subjecting to the approval 
							by the patient’s physician.
						</p>
						<p class="paragraph">Three types of Managed Care Plans:</p>
						<p class="paragraph">
							<b>Health Maintenance Organizations</b> (HMO) is an  arranged delivery system combining financing and providing health care services for enrollees that  pays for 
							care within the network and is assigned a primary care physician that will supervise most of his/her overall care. Typically, services are not covered if 
							performed by a provider not an employee of or specifically approved by the HMO, unless it is an emergency situation as defined by the HMO. Financial sanctions 
							for use of emergency facilities in non-emergent situations were once an issue; however, prudent layperson language now applies to all emergency-service 
							utilization and penalties are rare.
						</p>
						<p class="paragraph">
							An Independent Practice Association is a legal entity that contracts with a group of physicians to provide service to the HMO's members. Most often, the physicians 
							are paid on a basis of capitation, which in this context means a set amount for each enrolled person assigned to that physician or group of physicians, whether or 
							not that person seeks care. The contract is not usually exclusive, allowing individual doctors or the group to sign contracts with multiple HMOs. Physicians who 
							participate in IPAs usually also serve fee-for-service patients not associated with managed care.
						</p>
						<p class="paragraph">	
							<b>Preferred Provider Organizations</b> (PPO) pay more if you get care within the network. They still pay part of the cost if you go outside the network. In terms 
							of using such a plan, unlike an HMO plan, which has a co-payment cost share feature (a nominal payment generally paid at the time of service), a PPO generally does 
							not have a copay and instead offers a deductible and a coinsurance feature. The deductible must be paid in full before any benefits are provided. After the 
							deductible is met, the coinsurance benefits apply.
						</p>
						<p class="paragraph">	
							<b>Point of Service</b> (POS) plans let you choose between an HMO or a PPO each time you need care. A POS plan utilizes some of the features of each of the above plans. 
							Members of a POS plan do not make a choice about which system to use until the point at which the service is being used. In terms of using such a plan, a POS plan 
							has levels of progressively higher patient financial participation as the patient moves away from the more managed features of the plan. 
						</p>
					</ol>
				</ul>
				<p class="content-title">Classifications of Hospitals</p>
				<p class="paragraph"><b>by ownership:</b></p>
					<ul class="paragraph">
						<li>Proprietary Hospitals – hospitals that are owned by investors, also called shareholders, wherein the profit of the hospitals were distributed 
								to investors as dividends.
							<p class="paragraph">					- they pay federal and state income tax.</p>
						</li>
						<li>Not-for–Profit Hospitals – hospitals that are either owned by the government, through religious affiliations, or by community organizations. 
							The profits were used as the organization’s funds.
							<p class="paragraph">- They do not pay federal and state income tax.</p>
						</li>
					</ul>
				<p class="paragraph"><b>by the practice they are licensed to provide:</b></p>
					<ol type="1" class="paragraph">
						<li>General Hospitals</li>
						<ul class="paragraph">
							<li>Acute Care General Hospitals – are licensed to provide short term medical and surgical care for various illnesses that may or may not need 
									intensive care. These hospitals can be managed by government or by propriety corporations.</li>
							<li>Community and Regional Hospitals- serves the urban and rural populations with community-oriented facilities. They can also be managed by 
									government or by propriety corporations.</li>
							<li>Critical Access Hospitals (CAH) – receives cost-based reimbursement and focuses on providing medical care services for the needs of community citizens.</li>
						</ul>
						<li>Special Hospitals</li>
						<ul>
							<li>Specialty Acute Care Hospitals – provides specialized long-term acute care for a particular patient.</li>
						</ul>
						<li>Teaching-cum-Research Hospitals</li>
						<ul class="paragraph">
							<li>Teaching Hospitals – are accredited to teach and train future health care professionals.</li>
							<li>Research Hospitals – devotes research on various methods and technology to improve medical conditions.</li>
						</ul>
					</ol>
				<p class="paragraph"><b>Aspects of Hospital Services:</b></p>
				<ol type="1" class="paragraph">
					<li>Line Services- main services</li>
					<p class="paragraph">Ex. Diagnosis and treatment of illnesses, Intensive care units
					<li>Supportive Services- staff services</li>
					<p class="paragraph">Ex. Laboratory facilities, pharmacy service management
					<li>Auxiliary Services – supplementary services</li>
					<p class="paragraph">Ex.  Mortuary, dietary services
				</ol>
				<p class="content-title">Financial Management</p>
				<p class="paragraph"><b>Cost Shifting</b></p>
				<p class="paragraph">
					Cost shifting is the process of financing under pay services by transferring excess revenues from overpay services, and is  an existing feature  of medical care 
					reimbursement  The pervasiveness of cost shifting and insurance coverage gave hospital managers room to raise revenues as a means of supporting the hospital and 
					little incentive to find efficiencies that would reduce costs.  An impact on the practice of cost shifting in health care is the tremendous rise in expenditures 
					for Medicare and Medicaid that force the government to modify the reimbursement cost. Unpopular premium and tax increases had been pushed to congress in an attempt 
					to maintain the solvency of the Medicare program failed to work. Medicare refuse to pay for the cost of indigent care and it reneged on the fundamental cost-shifting 
					premise. As the rates of Medicare goes down, hospitals charges to commercial insurance companies had been 10 to 15 percent above average cost, the breakdown of cost 
					shifting pushed these overcharges up to 20 to 30 percent above cost. The federal and state governments argued that the provision of Medicare and Medicaid had reduced 
					the hospitals’ burden of bad debt and charity care, but the large number of people seeking care who were still uninsured made hospitals sceptical.
				</p>
				<p class="paragraph"><b>Cream Skimming</b></p>
				<p class="paragraph">
					Cream Skimming is providing only the services that are overpriced and not providing services that are more costly and subsidized. Hospital financial managers and 
					Medicare contributed to the end of cost shifting and the increase in the practice of cream skimming.
				</p>
				<p class="paragraph"><b>Economies of Scale</b></p>
				<p class="paragraph">
					Economies of Scale is achieved when more units of a good or service can be produced on a larger scale with less input costs.  It is also created when a greater 
					division of labor in a hospital allows its staff to become more specialized and efficient. Economies of scale are important is when hospitals with fewer facilities 
					are usually too small to offer a full range of services and can’t allow staff to specialize.
				</p>
				<p class="paragraph"><b>Diseconomies of scale</b></p>
				<p class="paragraph">
					Diseconomies of scale is the force that cause larger <a href="http://en.wikipedia.org/wiki/Business">firms </a>and governments to produce 
					<a href="http://en.wikipedia.org/wiki/Product_(business)">goods</a> and <a href="http://en.wikipedia.org/wiki/Service_(economics)">services</a> at 
					increased <a href="http://en.wikipedia.org/wiki/Average_cost">per-unit costs</a>. In which the average cost per unit rises as the quantity produced increases<sup>[1]</sup>. 
					It arises when a firm becomes too large.
				</p>
				<p class="paragraph"><b>Contracting Out</b></p>
				<p class="paragraph">Contracting Out is assigning a job to someone outside one's own business.</p>
				<p class="paragraph">
					Factors influencing contracting out:<br/>
					- cost savings that can be expected from economies of scale or increased competition<br/>
					- willingness of local officials to trade control for such cost savings<br/>
					- political incentives and obstacles to contracting out
				</p>
				<p class="paragraph">
					Contracting out has gained popularity because of several hypothesized advantages it has over direct public sector provision and because of perceived public sector 
					shortcomings; many believe that contracted providers can provide health care more efficiently than the public sector and that contracted providers may be held to a 
					higher level of accountability, as governments are likely to be more objective in evaluating the work of contracted providers than in evaluating their own.
				</p>
				<p class="content-title">Competition Among Hospitals </p>				
				<p class="paragraph">
					Hospital competition is different from other industries based on price competition and consumer, instead, it focus on quality in order to attract patients and physicians. 
					Quality is the most important aspect of medical care for it gives a better edge over the competition for it is important concern when choosing the right hospital.
				</p>
				<p class="paragraph"><b>Competing for Patients</b></p>
				<p class="paragraph">
					Hospitals compete for patients by price and service. This kind of competition leads to various treatments for patients of different types which in effect there are 
					more appropriate treatments across hospitals in more competitive areas.  The rise of Preferred Provider plans that provide full coverage only for a limited group of 
					hospitals has also increased the importance of direct marketing to patients.
				</p>
				<p class="paragraph"><b>Competing for Physicians</b></p>
				<p class="paragraph">
					Hospitals compete for physicians by helping them earn more money and build their practice by means of the hospital’s reputation and technological services. Competing 
					for physicians tends to motivate hospitals to be more strategic to respond by being the first or having the most provided services although it doesn’t necessarily 
					directs hospitals for an efficient use of inputs or services. 
				</p>
				<p class="paragraph"><b>Competing for Contracts</b></p>
				<p class="paragraph">
					It has become more and more common for insurance companies to make contracts directly with hospitals, negotiating a fixed or discounted price, and limiting patients 
					to hospitals with which the insurance company has a contract . Payers can direct patient flow even when contracts are not fully binding. Health Maintenance Organizations 
					(HMOs) can be more aggressive, sometimes threatening to transfer a large group of patients to a rival facility unless negotiations result in a substantial discount or 
					making approval conditional on assurances that the HMO will receive the lowest price the hospital gives to any contractor. Such large-scale arrangements are inevitably 
					less accommodating to the needs of individual patients and the professional autonomy of physicians. However, any attempts to implement public accountability and successful 
					cost control involves trade-offs.
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